Ethereum Scaling Solutions, StarkWare Launches Layer 3 Networks

Ethereum Scaling Solutions, StarkWare Launches Layer 3 Networks
Ethereum Scaling Solutions, StarkWare Launches Layer 3 Networks

The provider of Ethereum scaling solutions, StarkWare, goes one step further with its technology to further scale the Layer 1 and Layer 2 networks.

StarkWare Introduces Ethereum Layer 3 Hyper-scaling

According to a blog post on December 21, StarkWare announced a fractal scaling from Layer 2 to Layer 3. The company has already scaled Ethereum with Zero Knowledge (ZK) aggregation and plans to build a third layer on top of this infrastructure.

StarkWare stated that due to the high transaction costs on L1, most Ethereum activity will be done on Layer 2 in the near future. It added that some applications require special customization and the new Layer 3 can serve better.

Layer 3 will relate to L2 just as L2 is related to L1. It will be built on the StarkNet L2 platform to provide “super scalability” and further reduce Ethereum network fees.

Ethereum Hyper-scaling

StarkWare stated that the system that certifies L1 can also be used to certify L2 from another level;

“When the L2 also uses validity proofs submitted to L1, as StarkNet does, this becomes an extremely elegant recursive structure where the compression benefit of L2 proofs is multiplied by the compression benefit of L3 proofs.”

It added that if L2 can achieve a 1,000 times reduction in hypothetical costs, then L3 can be 1 million times lower than L1 while maintaining its security.

Eli Ben-Sasson, co-founder and president of StarkWare, mentioned Validium, a hybrid scaling solution that manages data out of the chain. Validium also uses zk-rollup to stack and execute transactions, but in this case, it is used to provide a customized data availability model for L3.

Another advantage is that it reduces the cost of the on/off ramp between L1 and L2, which is still expensive. The third layer offers cheaper and easier interoperability and can also be used as a “Canarian network” before the introduction of L2 applications.

The company stated that StarkEx currently operates as L2 but will be ported to L3, and then concluded:

L3 promises hyper scalability, better control of the technology stack for various needs, and privacy while maintaining the security guarantees provided by Ethereum (L1).

Outlook on Layer 2 Ecosystem

Due to the rising cost of Ethereum’s L1 gas, the L2 ecosystem has seen explosive growth this year. According to L2beat, all L2 networks are locked down at $ 5.4 billion as of press time.

So far this year this means an increase of 11,200%, which roughly corresponds to the entire DeFi TVL in August 2020.